31 August 2015

WiseOceans Brings Marine Education and Conservation Awareness to Four Seasons Resort Mauritius at Anahita

Four Seasons Resort Mauritius at Anahita has announced a new partnership with global marine education and conservation specialist WiseOceans to allow guests to discover more about the rich marine life in the mangroves and coral reefs of the surrounding Indian Ocean waters.


The Marine Discovery Programme, which includes a resident WiseOceans Marine Educator, regular Marine Life Talks and a new Marine Education Station at Bambou Beach, will engage guests with photos, facts and findings from the nearby lagoon, raising awareness of the importance of local marine life and of protecting the coral reef.

WiseOceans will additionally offer a choice of activities for guests to further engage with the Marine Educator on private excursions. These activities include:
  • Reef Discovery Snorkel - Escorted by the Marine Educator, guests may enjoy a 30-minute boat ride to a diverse area of the coral reef where they’ll snorkel with their own private guide to uncover the secrets of its beautiful marine life.
  • Marvellous Mangroves Snorkel - Prominently featured throughout the Resort and accessible directly from the beach, the protected mangroves are a haven for marine sightings and a perfect place for a guided snorkel.
  • Marine Educator Hire - Available for any guests booking a private boat excursion, the Marine Educator will accompany the boating excursion to guide all snorkelling sessions, sharing their marine knowledge throughout.
  • Underwater Camera Hire - Guests may capture their own underwater findings through rental of the WiseOceans camera and transfer their files directly to their laptop or mobile device upon return.

Commenting on the new partnership, Director of WiseOceans Lindsay Sullivan says: “There is so much beauty in the lagoons of Mauritius, and yet few people are aware of the diversity of marine life that exists in the mangroves and coral reefs found within them. Fewer still realise how important these habitats are to Mauritius, and this is something we’d like to change. Our aim is raise awareness of the incredible life they host, allowing people to discover a new world of marine life in Mauritius. We are delighted to work with Four Seasons Resort Mauritius at Anahita to engage resort guests, staff and the wider community to achieve this.

Funded through guest donations as part of the Resort's new Environmental Conservation Programme, the Marine Discovery Programme allows the ongoing monitoring of the health of the coral reefs and mangroves in the surrounding lagoon. All collected data will be submitted to the Ministry of Fisheries in Mauritius on an ongoing basis.  WiseOceans will also hold events within the local community to reach an even wider audience.

Four Seasons Resort Mauritius at Anahita will become the second Four Seasons resort to partner with WiseOceans, with Four Seasons Resort Seychelles having worked with the marine education experts since 2012, leading to the development of its Petite Anse Reef Restoration Project, which was launched earlier this year.

WiseOceans is a global marine conservation and education company that employs three core strategies, striving towards a global future with healthier oceans: to educate, to conserve and to involve. With world-class ocean outreach activities and innovative restoration projects, WiseOceans was founded on the belief that education is the way to achieve conservation of our oceans in the long-term, and as such, guests also have the opportunity to enjoy a wider choice of payable marine activities in private sessions with the WiseOceans Marine Educator.

HSBC Mauritius - Notice to Customers: Discontinuation of USD Cheques Clearing Services

Dear Customer,

Please note that with effect from 1 October 2015 HSBC Mauritius will provide US Dollar Cheques Clearing Services for USD cheques which have been drawn by HSBC Group office only.

USD cheques drawn by other banks presented to us in person for clearing will be returned to the customer immediately and those received by post/courier will be returned by mail to the customers’ latest address known by us.

We apologise for any inconvenience caused.

For more information, please call on 800 1234 or contact your Relationship Manager.

31 August 2015


The dangerous politics of central banks

Central banks are now major creditors of western governments, guarantors of the financial system, set the cost of borrowing, potentially control access to housing finance (via macroprudential policy) and, at the ECB, mediate between the claims of creditor and debtor governments. Their heads are well and truly over the parapet; they can expect years of being shot at.

30 August 2015

BAI : Banqueroute confirmée en 2009 !

KPMG révèle les détails accablants du Ponzi Scheme de Dawood Rawat dans une présentation aux membres du BAI Audit Committee en date du 29 mars 2011

28 August 2015

Mauritius: Opening of Investigation on Monopoly Situation in relation to Mobile Telephony Sector

The Executive Director of the Competition Commission of Mauritius (CCM) has opened an investigation on an alleged monopoly situation subject to review under section 46 of the Competition Act 2007, pertaining to the mobile telephony sector.

The Executive Director is concerned that two mobile telephony operators, which may be in a monopoly situation, could be engaging in both exclusionary and exploitative conduct in relation to their pricing policy for voice calling services.

At this early stage of the investigation, the underlying concern is that two mobile telephony operators could be discriminating between tariffs for voice calls placed within the same network (referred to as ‘on network calls’ or ‘on-net calls’) and calls placed to other networks (referred to as ‘off network calls’ or ‘off-net calls’). This price discrimination could be preventing, restricting or distorting competition in the local mobile telephony sector, which ultimately could deter or slow investment, innovation and growth in the sector. Additionally, the price discrimination between on-net and off-net calls could mean that subscribers are paying relatively more for off-net voice calls for reasons which may potentially be unrelated to cost differentials.

No conclusion has been reached at this stage and a firm conclusion can only be drawn after completion of the investigation.

At this stage, the Executive Director has concluded that he has reasonable grounds to believe that such conduct on the part of both mobile operators may constitute restrictive business practices. Upon completion of the investigation, the Executive Director will report his findings to the Commission. If the Commission concludes that the object or effect of the conduct is to restrict, prevent or distort competition in any market, or in any way constitutes the exploitation of a monopoly situation, it may take necessary steps to remedy the situation. Alternatively, the investigation might find no infringement of the Act, in  which case the investigation would be closed without further action. No financial penalties can be levied for a breach of the monopoly provisions of the Act; the focus instead is on taking measures to restore competition.

Deshmuk Kowlessur, the Executive Director of the CCM, said:

The mobile telephony sector is essential for providing an effective and quick means of communication to consumers and businesses alike. With a mobile cellular subscription rate of 130.9% for the year 2014, the mobile telephony sector represents a substantial part of the ICT economy in Mauritius. Mobile phones allow businesses to streamline their business processes and increase productivity. Healthy competition among operators thus ensures investment, innovation and growth within the sector for greater benefit for the economy. The CCM has been set up to safeguard competitive forces in all sectors of the economy. With this investigation launched into the conduct adopted by two mobile telephony operators, the CCM aims to assess whether there has been any breach of the provisions of the Competition Act 2007. If any breach is found following the completion of the investigation, recommendations aiming to maintain a fair and competitive market in the mobile telephony sector for the benefit of consumers, businesses and the economy at large, will be put to Commissioners for determination”.

27 August 2015

Mauritius: What SA could be

Mauritians are tired of hearing of their tax regime winning all the kudos for making their country Africa’s best place to do business

25 August 2015

IFC Review: Q&A with Singapore Senior Minister of State, Josephine Teo

Singapore has become a key player in the international finance arena. IFC Media spoke with Singapore’s Senior Minister of State for Finance and Transport Josephine Teo about the jurisdiction’s economic success and what the future holds for it.

Mauritius - Ghana Signature of Three Memoranda of Understanding

Three Memoranda of Understanding (MOU)/Agreements on bilateral cooperation between Mauritius and Ghana in various fields were exchanged yesterday at New Treasury Building, in Port Louis.  The documents concluded pertain to the following: mutual visa exemption; standardisation and conformity assessment; and, tertiary education.

The exchange of MOUs was held in the context of the four-day State Visit to Mauritius of the President of the Republic of Ghana, Mr John Dramani Mahama.  The event was preceded by a tête-à-tête between the Prime Minister, Sir Anerood Jugnauth, and President Mahama.

In a statement to the media following the ceremony, the Prime Minister said that this State Visit provides an excellent opportunity to explore new avenues of cooperation wherein both countries can forge a valuable development partnership and also to further strengthen existing ties.

According to Sir Anerood Jugnauth, both Mauritius and Ghana operate on the principles of democracy and rule of law, a practice which has earned us the respect of one and all.  Moreover, said the Prime Minister, both countries strongly believe in South-South Cooperation and are fervent supporters of closer economic links amongst developing countries and are committed to realise the dream of African unity and prosperity by striving to bring our peoples closer and by building the necessary conditions to create growth and wealth.

For his part, the President of Ghana observed that his visit to Mauritius begins a process that would crown years of collaboration and discussions at the highest level towards strengthening bilateral, trade and political cooperation between Ghana and Mauritius.  From discussions today with the Prime Minister, it is evident that there are a number of mutually beneficial opportunities for our two countries and for our business people, he pointed out.

The President also said that the presence of senior government officials and private sector participants in the Ghanaian delegation and who will be taking part in the business forum scheduled during the State Visit is indicative of Ghana’s desire to transform Ghana-Mauritius relationship into a partnership for promoting private sector engagement and commercial joint ventures.

MOUs/Agreements

  • Agreement on Mutual Visa Exemption providing for the waiving of visa requirements for diplomatic and service passport holders and for Mauritian nationals holding ordinary passports wishing to travel to Ghana for a period not exceeding 90 days, and vice versa.  This is expected to be instrumental in improving interconnectivity and the movement of people between both countries.
  • MOU between the Mauritius Standards Bureau and the Ghana Standards Authority.  The aim is to promote and facilitate trade between Mauritius and Ghana through the elimination of non-tariff barriers and enhance trade relations in areas of standardisation and conformity assessment.
  • MOU on cooperation in the Tertiary Education sector to provide for the mutual recognition of qualifications, inter-university linkages, staff and student exchanges, academic scholarship programmes, collaborative research and funding. 

The tête-à-tête

Important bilateral, regional and international issues of mutual interest and relevance were raised during the working session, in a friendly atmosphere reflective of the special relationship between both Mauritius and Ghana.

Both sides explored potential collaboration in the fields of ICT, sugar and the textile industry, as well as other areas beneficial for the two countries.

Mauritius and Ghana are looking forward to the signing of a Double Taxation Avoidance Agreement which will provide additional impetus for investments in the respective countries.

24 August 2015

Mauritius: Achieving The Second Economic Miracle And Vision 2030 - Prime Minister presents Economic Mission Statement

Creating 100,000 new jobs within the coming five years in 10 sectors of the economy through major investment projects to the tune of Rs183 billion and achieving an average growth rate of 5.5 per cent annually as from 2017. 

This is the main thrust of the Economic Mission Statement presented by Prime Minister Sir Anerood Jugnauth, at the launch of the High Powered Committee On Achieving The Second Economic Miracle And Vision 2030 on 22 August 2015 at the Cyber Tower, Ebène.

Four key focus areas have been identified, namely addressing unemployment; alleviating poverty; opening up the country and new air access policies; and sustainable development and innovation. The Prime Minister will personally drive and monitor these initiatives to ensure the nation’s economic well-being.

The economic model chosen for the development of the country, the Prime Minister said, will be centered on a number of core areas to fundamentally transform the economy. These include:

  • A revamped and dynamic  manufacturing base for the country
  • Leveraging on the Exclusive Maritime Economic Zone to develop the Ocean industry
  • Revisiting the services sector
  • Renovating the  Innovation, Technology and Communication sector

 Another major feature is the Africa Strategy being adopted to transform Mauritius into a regional platform for trade, investment and services.  This would be achieved through enhanced economic exchanges and improved air and sea connectivity, with the eventual creation of both a regional air and shipping company.

Tourism, higher education and developing the potential of Mauritius as a regional hub for healthcare and medical services as well as a medical education centre of excellence for Africa are among identified areas of growth.

The Prime Minister urged the public sector to actively drive and support the new economic agenda.   He is relying on the full collaboration of the private sector as well to take the economy to the next level.  In that respect he will be chairing a Joint Public-Private Sector Steering Committee which will meet every quarter to discuss issues of national interest.

The Prime Minister emphasised that the success in delivering on Mauritius’ economic agenda will largely depend on the proper mindset and the determination to make things happen. ‘As a Nation, we need to be ambitious; we need to believe in ourselves. Together we delivered the First Economic Miracle, against all odds. And, I have no doubt that we will do it, yet again, TOGETHER’, he concluded.

It is recalled that the High Powered Committee is chaired by the Prime Minister. The Committee will closely monitor project facilitation and implementation and the preparation of a Blueprint for Vision 2030.

Achieving The Second Economic Miracle And Vision 2030: An outline

Manufacturing Sector

Government aims to increase its share from 18% of the economy to 25% within the next three years by revamping the manufacturing base of the country.

Ocean Industry

Port Louis harbour will be developed as a major port for the region so as to handle much higher traffic and other port-related activities. As regards the fishing sector, Government is negotiating with major international fishing companies for the setting up of fishing and seafood processing facilities locally.
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Innovation, Technology and Communication sector

The focus will move towards the provision of high end activities like software and animation development, big data analytics, disaster recovery and cloud computing, amongst others.

Initiatives include establishing a techno entrepreneurship culture in Mauritius especially among the youth by supporting the creation of high-end and state-of-the-art incubators; and transforming Mauritius into a SMART island to embed the use of technology in the day-to-day life of every Mauritian.

Job Creation

Some 40 major private sector investment projects to the tune of Rs183 billion, are in the pipeline, of which foreign direct investments represent Rs140 billion. These projects will have the potential of creating 100,000 new direct and indirect jobs within the coming five years. The ten major sectors of job creation are: Financial services (15,000), ICT (15,000), Ocean Economy (25,000), Tourism (8,000), Manufacturing (5,000), Construction and Property Development (15,000), Health, Wellness and Biotechnology Sectors (2,000), Education and Knowledge Sector (3,000), Logistics (3,000) and SME (9,000).

For Financial Year 2015-2016 only, some 16,000 new jobs are being created. As regards the public sector, more than 7,000 vacancies will be filled in the 2015-2016 period. 

Sustainable development

The Public Sector Investment Programme for the next five years amounts to some 75 billion rupees. These heavy investments in the water sector, electricity, waste management, wastewater management, roads, port, airport and communication, amongst others, have already been announced and are being accelerated.

Works under the Road Decongestion Programme will kick off next year, in July at latest, and Government will invest Rs 15 billion over the next five years to address the road congestion problem.

23 August 2015

The Diplomat: When India Almost Intervened in Mauritius

Operation Lal Dora, a shelved 1983 plan by the Indian government to militarily intervene in the small Indian Ocean island state of Mauritius to prevent a coup, is a fascinating piece of Indian Ocean history and sheds light on how New Delhi thinks about the region. A 2013 paper authored by David Brewster and Ranjit Rai highlights a range of interesting developments in Indian military planning and strategic thinking around the operation, long seen as a perfunctory footnote in India’s Cold War history. Contrary to received wisdom about India’s inability to extricate itself from “non-aligned” thinking during the Cold War, Indira Gandhi’s government was quite ready to apply the levers of hard power against to protect Indian interests. Finally, the episode highlights the embarrassing degree to which the different branches of the Indian armed forces were stove-piped at the time; the Indian Army had no idea what the Navy was up in the planning phase of the operation and vice versa.

22 August 2015

The Business Times: Courts Asia seeks answers from Mauritius on failed bid

Courts Asia CEO Terry O'Connor (above) is demanding to know why Courts Asia should be forced to walk away from picking up Courts Mauritius after his team spent months negotiating as the "preferred bidder" with the special administrator and after coughing up a security deposit.

21 August 2015

Guernsey's international insurers total more than 800

The Guernsey Financial Services Commission (GFSC) licensed 45 new international insurers during the first six months of this year. 

This comprised six limited companies, two Protected Cell Companies (PCCs), 30 PCC cells, one Incorporated Cell Company (ICC), two ICC cells and four life policy cells.

The figures mean that there were a total of 816 international insurers licensed in Guernsey at the end of June 2015, made up of 244 limited companies, 67 PCCs, 393 PCC cells, 13 ICCs, 40 ICC cells and 59 life policy cells. This compares to a total of 797 GFSC-licensed international insurers at the end of December 2014, signifying a net growth of 19 so far this year.

Dominic Wheatley, Chief Executive of Guernsey Finance, said: "These figures reinforce the fact that Guernsey is home to a vibrant international insurance centre and is able to provide solutions to meet a range of different risk management needs. The half-year figures are particularly impressive when you consider how they follow and maintain several years of strong performance in the sector."

Further data on the new licences reveals that their owners' originate from a range of locations such as the UK, Cayman Islands, Finland and Switzerland, while the range of businesses written includes Insurance Linked Securities (ILS) and insurance lines covering property, After the Event (ATE) legal expense and longevity risk.

The past 12 months have been particularly positive for Guernsey's insurance industry as it has enhanced its reputation for risk management, particularly in relation to the emerging area of pension longevity risk where pension schemes utilise Guernsey captive and cell company structures such as ICCs to hedge longevity risk for their defined benefit liabilities.

This was sparked by the BT Pension Scheme's record-breaking £16 billion transfer of its liabilities to the Prudential Insurance Company of America using a Guernsey-based insurance company, BTPS Insurance ICC, to underwrite longevity arrangements which will protect the scheme against costs associated with potential increases in life expectancy. BTPS transferred longevity risk to the insurer, which in turn reinsured the longevity risk in the reinsurance market. Other schemes such as Towers Watson's Longevity Direct structure have also followed a similar method.

"Guernsey's experience and expertise in establishing and effectively utilising the cell company concept for businesses across the globe mean it is ideally positioned to service this emerging area and we expect that to continue in the latter part of this year. Those in charge of these pension schemes recognise the fact that Guernsey has modern and well-regarded insurance legislation and a reputation for innovation within the sector, which is supported by a mature financial services infrastructure," said Mr Wheatley.

To expand on the Island's emerging position in the area of pension longevity, Guernsey Finance is hosting the free-to-attend thought leadership event Longevity - is there life in captives? on Wednesday 14 October in London. The event, which takes places at the British Museum, will bring together experts from across the insurance and pension space for dialogue and debate surrounding the key industry issues.

20 August 2015

Tax blacklists - EU hypocrites!

Blacklists have been a feature of tax diplomacy ever since an internationally co-ordinated assault on tax havens began in the late 1990s.


Transparency International - Exporting Corruption, Progress Report 2015: Assessing Enforcement of the OECD Convention

Transparency International’s 2015 Progress Report is an independent assessment of the enforcement of the Organisation for Economic Co-operation and Development’s (OECD’s) Anti-Bribery Convention. The Convention is a key instrument for curbing global corruption because the 41 signatory countries are responsible for approximately two-thirds of world exports and almost 90 per cent of total foreign direct investment outflows. This is the 11th annual report. It has been prepared by Transparency International’s International Secretariat working with our national chapters and experts in the 41 OECD Convention countries. This report shows that there is Active Enforcement in four countries, Moderate Enforcement in six countries, Limited Enforcement in nine countries, and Little or No Enforcement in 20 countries. (Two countries were not classified.) 

Mauritius: Government is committed to set the country’s economy on a path of higher and sustained growth, says PM

We are at a challenging juncture in our country’s history. The Nation will judge us not by what we say at this moment, but by what we are doing to lift the lives of our countrymen and women. It will judge us by the legacy we leave behind for generations to come.

This statement was made yesterday by the Prime Minister, Sir Anerood Jugnauth, on the occasion of the Ground Breaking Ceremony of  Mont Choisy Real Estate and Golf Projects at Mon Choisy.

The Prime Minister highlighted that he wants the Parc de Mont Choisy project be developed in an inclusive manner that would integrate the local population and catalyse growth in the other sectors, including financial services, legal services, industry development and social enterprises, amongst others.

Prime Minister Jugnauth appealed to the promoters to devote a substantial amount of their investment for social programmes for the people living in this region and see to it that these are spent in training facilities, social amenities, community development, social housing and poverty alleviation. He added that they should also make special efforts at outsourcing to local SMEs.

The Prime Minister highlighted that the Government is aware that it has a small window to do what is necessary and what is right to put the country back on a path of sustainable development and prosperity.  He stressed that by accelerating and facilitating private sector investment projects, Government is seeking to set the country’s economy on a path of higher and sustained growth and employment.

He added that this measures will allow to create sustainable, fulfilling jobs, particularly for our youth, to steer away those living in poverty and will help to build resilience, so that we can bounce back faster from future economic and natural shocks.

Sir Anerood Jugnauth underlined that in essence, this is what the Government is going to do through the “High Powered Committee on Achieving the Second Economic Miracle and Vision 2030”, which will be officially launch on August 22, is simply to plan for tomorrow, by making adjustments today and routing our way for sustained economic growth for the next two decades.  He added that in so doing, Government will never deviate from its philosophy of focusing on people centered development.

17 August 2015

Botswana and Mauritius sign Double Taxation Avoidance Agreement

Botswana and Mauritius on Saturday August 15 signed a Double Taxation Avoidance Agreement, renewing a convention the two countries have had since 1995.

Minister of Finance and Development Planning, Mr Kenneth Matambo represented Botswana while Mauritius' Minister of Foreign Affairs, Regional Integration and International Trade, Mr Marie Joseph Noel Etienne Ghislain Sinatambou signed on behalf of his government.

Speaking at the ceremony, Minister Matambo said the convention had to be amended to make it compliant with international standards on transparency and exchange of information for tax purposes.

He said parliament amended the Income Tax Act in December 2012 to allow the Botswana Unified Revenue Service (BURS) to exchange information for tax purposes.

"Among others, the amendment of the Act provided for the exchange of tax information in response to a request for information from a competent authority of a treaty partner," he said.

He said it limited disclosure of tax information to persons who dealt with assessment, enforcement or collection of tax. "Therefore the tax information that your tax authority will exchange with us will be used only for tax purposes," Mr Matambo said.

For his part, Mr Sinatambou said that marked conclusion of yet another milestone signaling good relationship between the two countries. He however said the partnership should be enhanced to include investment in order to transform their economies from exporting raw materials but finished and enhanced products.

15 August 2015

13 August 2015

It is time for the Mauritian dream run to fade away

The name Mauritius sounds sonorous. Romantics insist the picture perfect island is the other name of dreams. Affluent professionals travel to this destination frequently to make more money. Money brought here is considered safe even from taxes. For all those fortune seekers, money is where Mauritius is.

11 August 2015

IFC Review: Bend Me, Shape Me… Restructuring & Reshaping Trusts in Bermuda

Ashley Fife examines options for restructuring and reshaping Trusts in Bermuda to enable trustees to adapt to unforeseen circumstances

IFC Review - FATCA: The Horse May Have Bolted, But…

Dr Angelo Venardos examines the controversial US FATCA legislation and considers issues regarding its constitutionality and whether there is any chance of repeal

Growing trend: Islamic finance goes offshore

The rise of Islamic finance and sukuk issuances have brought with it a growing phenomenon: Shariah banking is increasingly taking advantage of offshore banking jurisdictions, and this for a number of reasons. 

Courts Asia Bid to Acquire Courts Mauritius Unsuccessful

Courts Asia Limited (“Courts Asia” / the Company”) has announced that the Company’s bid for the sale of Courts Mauritius has been unsuccessful, despite the Special Administrators informing the Company that it was the preferred bidder, and no other bidder was being considered.

The Company’s discovery of the status of its bid was through an unannounced media conference by the Minister of Financial Services and Corporate Governance of Mauritius on 5 August 2015, which was not attended by the Special Administrators. The Company has yet to receive any formal communication on the outcome of the bid from the Special Administrators or any government body.

Group CEO of Courts Asia, Dr Terence Donald O’Connor, commented: “Needless to say, we are disappointed to have lost this bid and along with it, the opportunity for the Mauritius Courts business to return to the Courts group of companies. Our strategic plan around the Mauritius business was around the most positive outcome for Courts Mauritius employees and the supplier community, and thus to the benefit of all stakeholders.

The sale of Courts Mauritius was publicly advertised on 13 May 2015, with the Special Administrators issuing the rules for the bidding procedures, and evaluating the bids. The Company has confirmed that it will be pursuing resolution of the case.

10 August 2015

Tax Return Preparers Sentenced to Prison for Hiding Offshore Account and Assisting Wealthy Clients to Hide Millions in Secret Accounts at Israeli Banks

Two tax return preparers with offices located in California, Maryland and New York were sentenced today in Los Angeles for facilitating an offshore tax fraud scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. 

David Kalai was sentenced to serve 36 months in prison to be followed by three years of supervised release, with a condition of home confinement to last the entire term of release, and ordered to pay a $286,000 fine, and Nadav Kalai, David Kalai’s son, was sentenced to serve 50 months in prison to be followed by three years of supervised release, and ordered to pay a $10,000 fine.  The defendants’ sentences were imposed by U.S. District Judge Terry J. Hatter Jr. of the Central District of California.

On Dec. 19, 2014, a federal jury in Los Angeles convicted the Kalais of one count of conspiracy to defraud the Internal Revenue Service (IRS).  The Kalais were also each convicted of two counts of willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR).  An alleged co-conspirator, David Almog, who is charged in the second superseding indictment, remains a fugitive.  The Kalais advised and assisted their high net-worth clients in concealing millions of dollars of assets and income in secret foreign bank accounts and filing false federal income tax returns.  The defendants also maintained a secret offshore account of their own at Bank Leumi in Luxembourg in the name of a foreign sham corporation and failed to disclose the account to the IRS or the U.S. Treasury.

“The sentences imposed today make it clear that the department is aggressively prosecuting financial professionals like the Kalais, who assist U.S. taxpayers in concealing assets offshore and evading their tax and reporting obligations,” said Acting Assistant Attorney General Ciraolo.  “The days of hiding behind numbered accounts and sham corporations are over; accountholders are coming in, accepting responsibility and cooperating against their accountants, attorneys and advisors who actively facilitated their criminal conduct.”

“Today’s sentencing of David and Nadav Kalai is another victory for American taxpayers as IRS-Criminal Investigation (CI) continues its pursuit to stop offshore tax evasion schemes and bring these criminals to justice,” said Chief Richard Weber of IRS-CI.  “It is becoming increasingly difficult for criminals to hide their money offshore and IRS-CI will continue to level the playing field for all taxpayers by ensuring we are all playing by the same rules.”

According to the second superseding indictment and evidence introduced at trial, the Kalais were principals of United Revenue Service Inc. (URS), a tax return preparation business with 12 offices located throughout the United States.  David Kalai worked primarily at URS’ former headquarters in Newport Beach, California, and later at URS’ location in Costa Mesa, California.  Nadav Kalai worked out of URS’ headquarters in Bethesda, Maryland, as well as the locations in Newport Beach and Costa Mesa.

U.S. citizens, resident aliens and permanent legal residents have an obligation to report to the IRS on Schedule B of the U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign country in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained.  They are further obligated to report all income earned from the foreign financial account on the tax returns.  Separately, U.S. citizens, resident aliens and permanent legal residents with a foreign financial interest in, or signatory authority over, a foreign financial account worth more than $10,000 in a particular year must also file an FBAR with the U.S. Treasury by June 30 of the following year disclosing such an account. 

Evidence introduced at trial established that the co-conspirators purposefully prepared false individual income tax returns for their URS clients that did not disclose the clients’ foreign financial accounts nor report the income earned from those accounts.  In order to conceal the clients’ income, ownership and control of assets from the IRS, the co-conspirators incorporated offshore companies in Belize and elsewhere and helped clients open secret bank accounts at the Luxembourg locations of two Israeli banks, Bank Leumi and Bank B.  Bank Leumi is a large financial institution headquartered in Tel-Aviv, Israel, with worldwide branches.  Bank B is also a financial institution headquartered in Tel-Aviv with a worldwide presence.

The sham corporations that the co-conspirators incorporated in Belize and elsewhere were used to act as named accountholders on the secret Israeli bank accounts.  The co-conspirators then recommended and facilitated the transfer of client funds to the secret accounts and prepared and filed tax returns that falsely reported the money sent offshore as a false investment loss or a false business expense, or entirely omitted any income earned by a client from a foreign source.  The Kalais also failed to disclose the clients’ secret accounts on tax returns that they prepared, and caused the clients to fail to file FBARs with the U.S. Treasury as required.

Three URS clients who testified at the Kalais’ trial have pleaded guilty to tax felonies arising from their participation in the scheme.  On July 1, 2013, Alexei Iazlovsky, a client of URS and Nadav Kalai, pleaded guilty in U.S. District Court in Los Angeles to signing and filing a false federal income tax return for tax year 2008.  According to court documents and evidence introduced at trial, Nadav Kalai facilitated the incorporation of a nominee Belize corporation for Iazlovsky, assisted Iazlovsky with setting up an offshore account in Luxembourg at one of the Israeli banks that was held in the name of the Belizean corporation and prepared false federal income tax returns, which Iazlovsky signed and filed with the IRS, that concealed the existence, assets and income of Iazlovsky’s offshore account.  On Nadav Kalai’s advice, Iazlovsky diverted a total of $2.6 million in untaxed business receipts from Russian clients to his undeclared bank account in Luxembourg.

On July 17, 2013, Moshe Handelsman pleaded guilty in U.S. District Court in San Jose, California, to signing and filing a false income tax return for the 2007 tax year.  According to court documents and evidence introduced at trial, Handelsman was David Kalai’s client since the 1990s.  On David Kalai’s advice, Handelsman used three foreign bank accounts held in the names of two different sham foreign corporations to reduce his taxes.  The last of those accounts was held at the Tel-Aviv branch of one of the Israeli banks.  Nadav Kalai was Handelsman’s tax return preparer from 2003 through 2007.  During those years, Handelsman sent approximately $1.47 million offshore, which was fraudulently deducted as a business expense on corporate tax returns prepared by Nadav Kalai.

On Feb. 2, Baruch Fogel pleaded guilty in U.S. District Court in Los Angeles to failing to file an FBAR declaring his Bank Leumi account in Luxembourg.  According to court documents and evidence introduced at trial, David Kalai devised a scheme to reduce Fogel’s income taxes in 2002 and 2003 by using a sham offshore corporation and a secret offshore bank account at Bank Leumi Luxembourg held in the name of the offshore corporation.  David Kalai’s scheme involved obtaining $8 million in loans from Bank Leumi USA and transferring that money through one or more of Fogel’s U.S. businesses to Fogel’s Luxembourg bank account.  The $8 million in transfers were designed to make it appear that one or more of Fogel’s U.S. businesses incurred business expenses by paying Fogel’s offshore corporation.  Once the paper trail was created, $8 million was fraudulently deducted as business expenses on Fogel’s corporate tax returns prepared by URS.  David Kalai told Fogel not to disclose his control of the foreign bank account to U.S. authorities. 

The evidence at trial also established that the Kalais each failed to file an FBAR for calendar years 2008 and 2009 with respect to a foreign account held at Bank Leumi in Luxembourg.  According to the bank’s internal records from Luxembourg, the Kalais were the true owners of the account, which was held in the name of Anack Ltd., a nominee Belizean corporation.  In 2008 and 2009, their offshore bank account had more than $300,000 on deposit. 

Acting Assistant Attorney General Ciraolo commended the special agents of IRS-CI, who investigated the case, and Trial Attorneys Christopher S. Strauss and Ellen M. Quattrucci of the Tax Division, who prosecuted the case.  Ciraolo also thanked Assistant U.S. Attorney and Chief of the Tax Division Sandra R. Brown of the U.S. Attorney’s Office of the Central District of California and her office for their substantial support and assistance.

CAP: Open Letter to PM of Mauritius — Never Too Late for Justice: Arms Trafficking Inquiry Warrants Attention

In an open letter to the Prime Minister of Mauritius, Conflict Awareness Project’s (CAP) executive director Kathi Lynn Austin called today for a renewed inquiry into an international arms trafficking network alleged to have operated within the country, as well as the role of individuals within the Mauritian government who may have obstructed the investigation. The illicit operation is said to have targeted conflict zones in the Democratic Republic of Congo, Sudan, and Syria.

The government of Mauritius is reputed to be one of Africa’s least corrupt nations. Yet despite calls from an international investigative group and concerned citizens of Mauritius, as well as official pledges to address the matter, an investigation of a transnational arms trafficking operation with potential links to government officials has been stymied.

Without a proper inquiry,” says Kathi Lynn Austin, “an opportunity is missed to thwart black market traffickers who not only threaten rule of law in Mauritius but the peace and security of the global community.

CAP’s 2012 report “Viktor Bout’s Gunrunning Successors: A Lethal Game of Catch Me if You Can,” exposed an illicit arms trafficking operation, lead by two Russian nationals, that was launching in Mauritius. The report, which prompted multiple official investigations in Mauritius, details a global operation also involving entities and individuals in the United States, United Kingdom, Finland, South Africa, Australia, United Arab Emirates, and Iran.

07 August 2015

OECD: Model Protocol to the Tax Information Exchange Agreements (TIEAs)

This report provides the basis for jurisdictions wishing to extend the scope of their existing TIEAs to also cover the automatic and/or spontaneous exchange of tax information.

OECD Standard for Automatic Exchange of Financial Account Information in Tax Matters: Implementation Handbook

This first edition provides practical guidance to assist government officials and financial institutions in the implementation of the Standard. It sets out the necessary steps for implementation and will help financial institutions and governments implement the Standard more efficiently by promoting the consistent use of optional provisions, identifying areas for alignment with FATCA and addressing the operational and transitional challenges resulting from the staggered implementation of the Standard. It also contains answers to frequently asked questions (FAQs) received from business and governments, with a view to furthering the effective implementation of the Standard. The Handbook is intended to be a “living” document and will be updated on a regular basis.

05 August 2015

Nouveau traité fiscal – Rama Sithanen: «Ne coupons pas la branche sur laquelle nous sommes assis»

Serait-ce le début de la fin du secteur offshore mauricien ? C’est du moins ce que laisse penser l’ancien ministre des Finances, Rama Sithanen, dans un document qui circule au sein du secteur. La faute au nouveau protocole fiscal indo-mauricien

Le Defi Media Group

04 August 2015

BMJ: Consumption of hot spicy foods and mortality—is chilli good for your health?

Diet and nutrition have long been regarded as central to health and longevity. Given the vast variety and complexity of human diets, however, the ongoing challenge has been to identify the specific dietary components with a direct effect on health and mortality. The general consensus is that health gains for chronic disease are most likely from healthy dietary patterns that include adequate consumption of fruits, vegetables, whole grains, nuts, seeds, fibre, and fish and that are low in red and processed meats, sugary beverages, and salt. Yet there remains a parallel interest in other common dietary components that may serve as functional foods. Hot spices are one such example and are the subject of a linked paper by Lv and colleagues.

Among 0.5 million adults in the China Kadoorie Biobank the authors examined the prospective association of self reported consumption of spicy foods with total and cause specific mortality. Over a median of 7.2 years of observation with 3.5 million person years, during which 20 224 deaths occurred, they report a 14% lower risk (95% confidence interval 10% to 18%) in total mortality when comparing those who reported frequent consumption of spicy foods (6 or 7 days a week) with those who reported little consumption of spicy foods (less than once a week). A similar reduction in mortality was apparent even among those who reported consuming spicy foods 3-5 or 1 or 2 days a week compared with those whose consumption was infrequent.

How should we interpret these novel findings and what are their implications for nutritional advice? As the authors acknowledge, a cause and effect relation cannot be inferred from their work. In this prospective study, Lv and colleagues have shown temporality of association, but we need to evaluate additional criteria to judge the strength of evidence. Their findings should be considered hypothesis generating, not definitive, and will undoubtedly encourage further work.

The use of hot spices in food to enhance taste has captured the attention of the popular press as well as food outlets, including supermarkets, restaurants, and fast food shops, fuelling a worldwide trend towards greater consumption. In parallel, there is increasing scientific interest in spicy foods. Many potential benefits have been suggested for chilli or its bioactive compound capsaicin, including but not limited to antimicrobial, anti-oxidant, anti-inflammatory, and anti-cancer properties, a beneficial influence on gut microbiota, and anti-obesity effects through thermogenesis and appetite, energy balance, and weight management.

Future research is needed to establish whether spicy food consumption has the potential to improve health and reduce mortality directly or if it is merely a marker of other dietary and lifestyle factors. The added contribution of spicy food intake to the benefits of a balanced healthy diet and healthy lifestyles also remains to be investigated. However, the current findings should certainly stimulate dialogue, debate, and further interest in research.

IFC Review: Why Incompetence in Banking is Worse than Greed

Following a series banking crises, Professor Boudewijn de Bruin examines how incompetence in banking is worse than greed

IFC Review: From Secrecy to Solid Confidentiality - A bright Future for Switzerland

Herman Krul examines the Swiss journey from financial secrecy to transparency and how this move leaves the jurisdiction well positioned for the future

03 August 2015

WSJ: Investigation of Seized Hedge Fund Highlights Risks

Regulators seize polo player’s Kijani fund in lightly regulated Cayman Islands market

OECD: The Global Forum releases new compliance ratings on tax transparency

The Global Forum on Transparency and Exchange of Information for Tax Purposes published new peer review reports today for 12 countries or jurisdictions, moving further ahead with its goal to implement global standards on transparency and exchange of information for tax purposes.

Phase 1 reports on Albania, Burkina Faso, Cameroon, Dominican Republic, Lesotho, Pakistan and Uganda assessed their legal and regulatory frameworks for transparency and exchange of information on request. These countries were assessed to have legal frameworks in place to enable them to move to the next stage of the review process, which will assess exchange of information practices.

The Global Forum also reviewed exchange of information practices through Phase 2 peer review reports in Lithuania and Sint Maarten. Both were given a rating for compliance with the individual elements of the international standard and an overall rating with Lithuania receiving an overall rating of “Compliant” and Sint Maarten an overall rating of “Partially Compliant.”

Jurisdictions continue to request supplementary reviews that assess steps taken to address recommendations of the Global Forum to address gaps in their legal frameworks and exchange of information practices identified in previous reviews. This included the Marshall Islands, which had been blocked from moving to Phase 2 of its review process due to significant gaps in its legal framework. A supplementary review concluded that key changes to its legislation now enable the Marshall Islands to move to Phase 2.

Austria, which was rated “Partially Compliant” in July 2013, has since implemented a number of recommendations by the Global Forum, leading to an upgrade of its overall rating to “Largely Compliant” in its supplementary report. The supplementary report of the British Virgin Islands, which assesses progress made since its Phase 2 report in July 2013 also concluded that based on significant improvements having been made, its overall rating be upgraded from “Non-Compliant” to “Largely Compliant.”

The Global Forum is the world’s largest international tax group, with 127 members on an equal footing. The Forum has now completed 198 peer reviews and assigned compliance ratings to 80 jurisdictions that have undergone Phase 2 reviews. Of these, 21 jurisdictions are rated “Compliant”, 46 are rated “Largely Compliant”, 10 are rated “Partially Compliant” and 3 jurisdictions are “Non-Compliant.” A further 11 jurisdictions are blocked from moving to a Phase 2 review due to insufficiencies in their legal and regulatory framework.

In an important step towards the smooth implementation of the OECD’s standard on Automatic Exchange of Information, the Global Forum has launched a multilateral process to evaluate confidentiality and data safeguards frameworks in more than 90 jurisdictions which have committed to begin automatic information exchange by 2017 or 2018.

The Global Forum continues to ensure that the benefits of participation in the new tax transparent and cooperative environment are available to all. It has conducted a number of training seminars to help jurisdictions prepare for peer reviews, sensitize tax auditors in the use of the exchange of information infrastructure and equip governments to implement automatic exchange of information. Around 200 tax experts participated in seminars in Colombia, Cameroon, Ghana and Kenya. The Global Forum will also support a new pilot project on Automatic Exchange of Information announced jointly by Ghana and the UK on the sidelines of the 3rd Financing for Development Conference in Addis Ababa.

Global Forum members will meet at their annual plenary meeting on 29-30 October 2015 in Bridgetown, Barbados.

The Global Forum releases new compliance ratings on tax transparency

The Global Forum is the world’s largest international tax group, with 127 members on an equal footing. The Forum has now completed 198 peer reviews and assigned compliance ratings to 80 jurisdictions that have undergone Phase 2 reviews. Of these, 21 jurisdictions are rated “Compliant”, 46 are rated “Largely Compliant”, 10 are rated “Partially Compliant” and 3 jurisdictions are “Non-Compliant.” A further 11 jurisdictions are blocked from moving to a Phase 2 review due to insufficiencies in their legal and regulatory framework.
In an important step towards the smooth implementation of the OECD’s standard on Automatic Exchange of Information, the Global Forum has launched a multilateral process to evaluate confidentiality and data safeguards frameworks in more than 90 jurisdictions which have committed to begin automatic information exchange by 2017 or 2018.

U.S. Department of State » Trafficking in Persons 2015 Report » Mauritius: Tier 2 Watch List

Mauritius is a source, transit, and destination country for men, women, and children subjected to forced labor and sex trafficking. Secondary school-aged girls and, in fewer numbers, younger girls from all areas of the country, including from Rodrigues Island, are induced or sold into prostitution, often by their peers, family members, or by businessmen offering other forms of employment. Taxi drivers provide transportation and allegedly introduce girls and clients. Girls and boys whose mothers engage in prostitution reportedly are vulnerable to exploitation in prostitution at a young age. Some women addicted to drugs are forced into prostitution. Women from Rodrigues Island are subjected to forced labor in domestic service in Mauritius. In recent years, small numbers of Mauritian adults have been identified as labor trafficking victims in the UK, Belgium, and Canada. Malagasy women transit Mauritius en route to employment as domestic workers in the Middle East, where they often are subsequently subjected to forced labor and sex trafficking. In previous reporting periods, Cambodian fishermen were subjected to forced labor on foreign fishing boats in Mauritius’ territorial waters. Mauritius’ manufacturing and construction sectors employ approximately 37,000 foreign migrant workers from India, China, Bangladesh, Sri Lanka, and Madagascar, some of whom are subjected to forced labor.

The Government of Mauritius does not fully comply with the minimum standards for the elimination of trafficking; however, it is making significant efforts to do so. During the reporting period, the government made modest efforts to identify and provide protective services to child victims of sex trafficking and continued to conduct extensive public awareness campaigns to prevent child sex trafficking and reduce the demand for commercial sex acts involving children. Despite these measures, the government did not demonstrate overall increasing anti-trafficking efforts compared to the previous reporting period; therefore, Mauritius is placed on Tier 2 Watch List. The government did not prosecute or convict any trafficking offenders during the reporting period. Additionally, there remained a general lack of understanding among law enforcement of trafficking crimes outside the realm of child sex trafficking, despite increasing evidence that other forms of trafficking exist in Mauritius, including the forced labor of adults. The government failed to identify or provide any protective services to adult labor trafficking victims and did not make any tangible efforts to prevent the trafficking of adults during the reporting period. For example, despite the presence of approximately 37,000 migrant workers in Mauritius, the government maintained a severely inadequate number of inspectors in its Special Migrant Worker Unit tasked with monitoring employment sites, and failed to proactively identify trafficking victims among workers protesting employment abuses. Instead, the government deported 20 such workers during the reporting period.

RECOMMENDATIONS FOR MAURITIUS:

Use anti-trafficking legislation to investigate and prosecute trafficking offenses and convict and punish trafficking offenders, including in cases involving labor trafficking or forced prostitution of adults; provide law enforcement officials, magistrates, prosecutors, social workers, and labor inspectors with specific anti-trafficking training so officials can effectively identify victims, investigate cases, and refer victims to appropriate care; increase coordination between law enforcement entities, NGOs, and international organizations on cases involving foreign trafficking victims; establish procedures to guide officials in proactive victim identification among at-risk populations, including women in prostitution and migrant workers; create an inter-ministerial committee to increase coordination among relevant government entities; develop a national action plan to combat trafficking and allocate sufficient funding to implement the plan; increase the number of labor inspectors responsible for monitoring the employment of migrant workers; and conduct a national awareness campaign on all forms of trafficking.

PROSECUTION

The government sustained modest anti-trafficking law enforcement efforts relating to child sex trafficking, but failed to make any tangible law enforcement efforts to address adult forced labor during the reporting period. The Combating of Trafficking in Persons Act of 2009 prohibits all forms of trafficking of adults and children and prescribes penalties of up to 15 years’ imprisonment for convicted offenders. In addition, the Child Protection Act of 2005 prohibits all forms of child trafficking and prescribes punishment of up to 15 years’ imprisonment; the Judicial Provisions Act of 2008 increased the maximum prescribed punishment for child trafficking offenses to 30 years’ imprisonment. These penalties are sufficiently stringent and commensurate with those prescribed for other serious crimes, such as rape. During the reporting period, the government reported nine trafficking investigations, but no prosecutions or convictions. This is a decrease from the previous reporting period, when the government initiated five prosecutions but failed to convict trafficking offenders. Eight of the investigations involved child sex trafficking offenses and one involved the forced prostitution of an adult; all the investigations remained pending at the close of the reporting period.

The government has never reported any prosecutions involving adult victims of sex trafficking. It has never taken any law enforcement action against labor trafficking offenses, including forced labor on foreign fishing boats illegally operating in Mauritius’ territorial waters and forced labor of migrant workers in the construction and manufacturing industries. The Minor’s Brigade of the Mauritian Police Force referred 14 cases of child labor to the Ministry of Labor, Industrial Relations, and Employment (MOL), but no additional law enforcement action was taken; some of these cases might have involved child labor trafficking. Although the police included training on trafficking to approximately 330 new police recruits as part of their basic training requirements, with the exception of cases involving child sexual exploitation, there remained a lack of understanding of trafficking among law enforcement and Mauritian officials generally. The government did not report any investigations, prosecutions, or convictions of government officials complicit in human trafficking during the reporting period.

PROTECTION

The government sustained efforts to protect child sex trafficking victims, but failed to identify or provide adequate protective services to other trafficking victims, including adults. The government identified two child sex trafficking victims during the reporting period, a decrease from seven victims identified in 2013. The Minors Brigade systematically referred all cases of identified children in prostitution to the Child Development Unit (CDU) of the Ministry of Gender Equality, Child Development, and Family Welfare for assistance. CDU officials referred one victim to a multipurpose NGO shelter for care. The government paid the NGO approximately 7,565 rupees ($239) per month to care for the child. The other victim was returned to her family. The government provided the two victims with medical and psychological assistance in public clinics and child welfare officers accompanied them to these clinics; police worked in conjunction with these officers to obtain statements from the children. The government, partially in collaboration with a local NGO, provided two trainings on child sexual exploitation offenses to 83 government officials; these trainings focus on victim protection measures. The MOL does not proactively identify child labor trafficking victims and does not have a formal referral mechanism to ensure such victims receive care.

The government failed to identify or provide any services to adult victims of labor trafficking. The government identified one adult sex trafficking victim; however, it is unclear whether the government provided any services to this victim. Due to the lack of understanding of human trafficking among law enforcement, some adult victims of forced prostitution and forced labor may have been penalized for unlawful acts committed as a direct result of being trafficking. For example, law enforcement officers and prosecutors generally did not investigate whether adult women were involuntarily engaging in prostitution. During the reporting period, immigration officials regularly turned back single Malagasy women, traveling on their own, with less than 4,200 rupees ($132) who attempted to enter the country on tourist visas on the grounds that they might be coming to Mauritius to engage in prostitution; some of these women might have been trafficking victims. Additionally, under Mauritian law, migrant workers who strike are considered to be in breach of their employment contracts and can be deported at the will of their employers. Some migrant workers who gathered to protest abuses relating to their employment were deported during the reporting period; these deportations took place without conducting comprehensive investigations or screenings to identify if the individuals were victims of forced labor. The 2009 anti-trafficking law specifically provides legal alternatives, such as temporary residency, to removal to countries in which the trafficking victims would face retribution or hardship.

PREVENTION

The government sustained strong efforts to prevent the sex trafficking of children and reduce the demand for commercial sex acts, but demonstrated weak efforts to prevent other forms of trafficking. The Police Family Protection Unit and the Minors Brigade continued extensive public awareness campaigns on child abuse and child rights at schools and community centers that included information on the dangers and consequences of engaging in or facilitating child prostitution. The Ministry of Tourism and Leisure also distributed pamphlets warning tourism industry operators of the consequences of engaging in or facilitating child prostitution. However, the government does not have an inter-ministerial coordinating body or a national action plan dedicated to combating all forms of trafficking. The government did not conduct any awareness campaigns relating to other forms of trafficking and did not make any discernible efforts to reduce the demand for forced labor during the reporting period. The MOL did not investigate child labor cases during the reporting period, despite receiving information on such cases from the police. The MOL is required to approve all employment contracts before migrant laborers enter the country. However, reports indicate many migrant laborers enter the country with incomplete contracts or contracts that have not been translated into languages that the workers understand. Additionally, the MOL’s Special Migrant Workers Unit, which is responsible for directly monitoring and protecting all migrant workers and conducting routine inspections of their employment sites, was staffed by only four inspectors; this number of inspectors is severely inadequate, as there are approximately 37,000 migrant workers currently employed in Mauritius. The government provided anti-trafficking training or guidance for its diplomatic personnel.

01 August 2015

Offshore : Maurice perd du terrain face à Singapour

Le flou persiste concernant le sort réservé à l’accord indo-mauricien de non-double imposition. Le dossier est traité avec énormément de discrétion. Entre-temps, le centre financier singapourien continue à prendre de l’avance au sein du marché indien par rapport à son concurrent mauricien.